A few years ago, when the on-demand laundry sector exploded, startups Laundrapp and Zipjet grabbed headlines with high-profile VC investment and buy-and-build strategies.
Meanwhile, bootstrapped competitor Laundryheap – also founded in 2014 – quietly built up its business in the background.
“The typical route for an on-demand marketplace founded at that time was to raise a lot of VC capital pretty quickly. We took a different route,” CEO and co-founder Deyan Dimitrov tells TechBlast.
“For the first three years, we bootstrapped. We worked hard to iterate our model, figure out kinks in the business plan, and refine our operations. We didn’t raise VC until we knew the model was sound and that we were confident we knew exactly what we’d achieved with external capital.
“In contrast, our competitors in the sector ran into trouble and ran out of runway just as we were taking off and going global. I believe that biding our time before deciding to raise investment, enabled us to outlast, and eventually acquire, our competitors.”
Berlin-founded Zipjet merged with London’s Laundrapp in 2019 under the latter’s brand amid fresh investment. However, the business would enter administration in 2020 before being bought out by Inc Retail, part of the Inc & Co Group.
Laundryheap, also founded in London by Dimitrov, Mayur Bommai and Ruxandra Lica, now operates across 16 towns and cities in the UK, plus 10 additional international markets, including the US, Singapore and the UAE. Serving both the consumer and B2B markets, it has brokered key laundry partnerships with Holiday Inn, Premier Inn, JustEat, UnderTheDoormat, Ibis and Best Western.
That has seen it become the world’s biggest provider of on-demand laundry and dry-cleaning services. In 2021, the company saw growth of more than 300%. This week it acquired Laundrapp, with all that company’s employees retained, taking its workforce to 80.
TechBlast has recognised Dimitrov with its Star of the Week award as a result.
“Taking too much investment at an early stage can also disrupt the foundations for long-term success,” he says. “Rather than being directed to chase growth metrics at any cost, we were able to scale up our operations in a sustainable way.
“After three years of moulding our own viable business model, Laundryheap had become even more appealing to external investors – and by that point, we were able to truly capitalise on the investment. To date, we’ve now raised a total of £7m in funding, from both VCs and angel investors and we’re the world’s largest on-demand laundry and dry-cleaning startup.”
That £7m compares with the combined £30m raised by Laundrapp and Zipjet.
Dimitrov has this advice for entrepreneurs: “If you are considering bootstrapping your business, do it if you can. Don’t be afraid to bide your time, even if your competition initially dominates the market and you feel like you’re getting left behind.
“Identify the most opportune time to take VC investment, and make sure it’s on your own terms. Keep your head down and your focus on the path to profitability; it’ll stand you in good stead in the long term.”